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Symantec Scoops Up MessageLabs in $700M Deal

MessageLabs boosts Symantec's software-as-a-service business, executives say

In a move designed to boost its software-as-a-service offerings as well as its messaging security portfolio, Symantec today announced plans to acquire MessageLabs for $695 million.

MessageLabs generated approximately $145 million in revenue during the fiscal year ending July 31 and grew by more than 20 percent over the prior fiscal year.

"Symantec will capitalize on cross-selling and up-selling its existing SaaS offerings of backup, storage, and online remote access into the MessageLabs customer base," the security giant said. "And future SaaS offerings, leveraging Symantec technology in data loss prevention, compliance, endpoint security and archiving, will be enhanced by MessageLabs’ expertise in SaaS sales, operations and support."

Symantec's SaaS offering, the Symantec Protection Network, will be folded into the MessageLabs operation and MessageLabs CEO Adrian Chamberlain will head up the unit, according to Greg Hughes, chief strategy officer at Symantec.

Several leading providers of email and messaging security have been acquired over the past two years. Cisco acquired IronPort in January 2007 for $830 million, and Google snapped up Postini in July 2007 for $625 million. (See Cisco Buys IronPort and Google Plucks Postini.)

Chamberlain says his company "felt no pressure" to make a deal, but that Symantec's "superior resources" and broad sales and marketing channels will make it possible for the organization to "accelerate our roadmap" and grow more quickly.

Symantec already offers both messaging security software and messaging security appliances. The addition of a SaaS offering will make it possible for the vendor to let enterprises choose the way they want to implement messaging security capabilities, Hughes says.

Enterprises also are looking for "a more complete picture" of the risk they face, and such a picture is "hard to stitch together when you're dealing with a patchwork of offerings," Hughes states. Symantec and MessageLabs will integrate their tools and services following the merger, he says.

The agreement is subject to customary closing conditions including regulatory approvals, and is expected to close by the end of the 2008 calendar year.

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